LONGMONT -- The Longmont Humane Society is asking for $772,227 in donations by Nov. 30 to avoid possible foreclosure later this year.

Construction cost overruns from the facility's expansion that began in 2006 and six years of financial deficits have drained the organization's reserves, leaving the humane society unable to make its 2013 and subsequent annual loan payments, executive director Liz Smokowski said.

The nonprofit needs to raise this year's payment within four months or the organization could face foreclosure or be forced to file for bankruptcy as early as December, said Smokowski, who inherited the loan when she was hired at the end of 2011.

In 2006, the town of Lyons, which uses the society's services, issued a bond for $6 million on behalf of the humane society under the state's Municipalities Development Revenue Bond Act to allow the society to begin construction. Wells Fargo now holds the loan.

In 2005, philanthropist Susan Allen of New York had promised the humane society $5 million for the expansion of its facility. That gift came over five years in $1 million increments.

Megan Dec and her daughter Scarlett, 5, both of Boulder, look at rats at the Longmont Humane Society Thursday. The Humane Society is asking for $772,000 in donations by November to make their annual mortgage payment following six years of deficits and a $9 million building expansion.
(Kai Casey/Times-Call)

The bond allowed the organization to begin construction right away on its expansion.

The organization's financial problems are due to construction costs for the 43,000-square-foot expansion and annual deficits from 2006 to 2011 exceeding $1.6 million. The cost of the expansion was forecast to be about $8.2 million but came in at $9 million by the time it opened in January 2009, Smokowski said.

Donations decreased starting in 2007 following the economic downturn, and operating costs increased once the expansion was completed due to higher utility costs and expenses associated with the care of more animals.

Addison Dec, 7, plays with "Audi," a 12-year-old pomeranian husky, at the Longmont Humane Society Thursday. The Humane Society is in financial trouble, needing $772,000 by November to make their annual mortgage payment and avoid possible foreclosure. (Kai Casey/Times-Call)

"The fact that we filled this building with animals right off the bat told us there was a community need and it was sort of an 'If you build it they will come' type of thing," Smokowski said. Currently loan-holder Wells Fargo has refused to renegotiate the loan. More than a dozen other banks have refused the organization's request to take over the loan, mostly due to the deficits, Smokowski said.

Shortly after Smokowski's arrival, the humane society hired an auditor to go over financial statements from 2003, which revealed six consecutive years of deficits.

Staff and program cuts in 2012, Smokowski's first full year as the executive director, led to a financial surplus of about $35,000, following a loss of more than $260,000 in 2011.

Last year, Smokowski reduced staff by 30 percent, closed three of the organization's four thrift stores and moved the clinic, which was located offsite, into the expanded facility to cut costs.

Further cuts are unlikely because they would put the quality of service at risk, Smokowski said.

The nonprofit has launched a fundraising campaign, The Longmont Humane Society: Serving the Community Now and Forever, focused on large gifts to achieve the organization's immediate and long-term goals, which include paying off the remaining $3.1 million on the loan by the fall of 2014.

Four loan payments of $772,000 remain, including the one due in November.

The humane society's building is collateral on the loan. Therefore, the town of Lyons is exempt from liability, said Lyons' finance director Tony Cavalier.

Longmont Humane Society Board President Shelly McLeod credits Smokowski's experience as executive director for other area organizations, including Safe Shelter of St. Vrain Valley and The Tiny Tim Center, and business background for the organization's first financial gain in six years.

McLeod said the organization is in "crisis mode," and asking for help from the community is one of the nonprofit's only remaining options.

Clay Evans, who served as the interim executive director for the Humane society in 2008 and 2009, concurred that Smokowski "is doing a very good job in a very difficult situation, not of her making."

"I think this problem goes back many years, to when the shelter accepted a large gift with strings attached and built a facility that is simply out of scale with the Longmont community and the shelter's donor base," Evans said. "Longmont Humane Society deserves praise for being willing to give animals a shot that a lot of shelters would put off, but you have the money to do those things or you can't."

Smokowski is the humane society's fifth executive director since 2008.

Linda Tyler preceded Evans, who said he chose not to apply for the permanent position after seeing the financial state of the organization. Neil Trent served as executive director from 2009 to 2010. Kim Walje, who started in March 2011 immediately preceded Smokowski.

McLeod said excessive turnover has been a contributing factor to the organization's financial difficulties.

Mallory Hochwender, a client care team supervisor, said she was shocked and discouraged by the news and is putting all of her faith in the campaign that she hopes will save the nonprofit where she volunteered as a child.

"I think when you work at a nonprofit you have to be equipped with eternal optimism," Hochwender said. "For now, I'm staying positive that the community recognizes that the services we provide are above and beyond and pulls us through this."

Smokowski said she is confident that if the humane society can pay off the remaining loan amount, which she describes as "the thorn in our side," the organization will continue to see financial gains and improvements.

Avery, 9, right, and her brother Hogan, 4, both of Longmont, play with kittens at the Longmont Humane Society Thursday.The Humane Society is launching a campaign to raise $3.1 million to pay off the loan for their building expansion by fall 2014.
(Kai Casey/Times-Call)

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